The Securities and Exchange Commission charged John David Gessin and two of his businesses, Equifunds Inc. and Ice Fleet LLC, with defrauding investors and misappropriating investor funds.
Equifunds Inc. was headquartered in Laguna Niguel, California, and Ice Fleet was headquartered in Beverly Hills, California.
According to the SEC’s complaint, filed in the United States District Court for the Central District of California, Gessin presented himself as a successful entrepreneur and used the alias “John David” to disguise his past, including a criminal record and bankruptcies, raising over $1.6 million from five retail investors, including a veteran and an elderly retired nurse. Gessin told investors their money would be used to purchase, sell, and distribute fuel.
Allegedly, Gessin falsely told his investors that the funds they entrusted to him would be used solely for business purposes, and that he was not using “a dime” of their money for his personal benefit.
However, the SEC claims Gessin misappropriated a significant portion of investor funds to pay his personal expenses, including the mortgage and taxes on a home in a gated community, cars, hotel stays and gifts to friends and family members.
According to the complaint, in March 2020, Gessin suddenly stopped paying investors the amounts they were owed. Gessin falsely told investors that the COVID-19 pandemic had severely impacted his business and that he was unable to repay them, despite receiving nearly $1.3 million in relief funds from the Small Business Administration.
The complaint charges Gessin, Equifunds, and Ice Fleet with violating antifraud provisions. The SEC seeks permanent injunctive relief, including preventing Gessin from participating in the issuance, purchase, offer or sale of any security with the exception of Gessin purchasing or selling securities for his own personal accounts. The SEC also seeks disgorgement of ill-gotten gains plus prejudgment interest, civil penalties and an officer and director bar against Gessin.
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